The update you just downloaded was not to the game itself, but rather to the Diablo III Launcher. Because the Launcher update has no actual impact on gameplay, it can get pushed out at any time, and it does not matter whether your friends have updated it.
Other gameplay updates will come in the form of either Patches or Hotfixes.
Hotfixes will be announced on the Diablo Website or forums (sometime a few hours or days after the fact), and are applied server side. These do not require you to download anything, and your gameplay experience will reflect the changes immediately. Occasionally, these hotfixes require Blizzard to restart the games servers, either momentarily, or for an extended period. Either way, everyone is up to date because all of the changes are server side.
Patches will generally only occur in conjunction with announced server restarts or downtime. You will not be able to connect to the game with an out of date client, and before the patch goes live, you will be disconnected, as the servers go offline for Blizzard to apply their side of the patch. If you never close the game, you won't get the updates, but, since you'll have been disconnected, you also won't be able to log back in - after the update goes live, your attempts to connect to the server will be rejected until you update to the newest client software.